Skype shutdown: Why Microsoft is pulling the plug

Video-messaging platform was once dominant player, now reduced to niche influence

Skype will no longer be available starting in May, Microsoft said. Getty Images / AFP

Skype will soon join the ranks of defunct AOL Instant Messenger, MySpace, Internet Explorer and other once prominent platforms, according to its parent company Microsoft.

The company announced on Friday that the once popular video and voice-messaging service would no longer be available starting in May. “Over the coming days you can sign in to Microsoft Teams Free with your Skype account to stay connected with all your chats and contacts,” a post on X read. “Thank you for being part of Skype.”

In a social media post, Microsoft announced that Skype would no longer be available beginning in May, and that the company was encouraging users to switch to Microsoft Teams. Photo: Microsoft / X

In a lengthy press release, Microsoft explained that it was seeking to “streamline communications offerings” and give more attention to Microsoft Teams, which the company, which is based in Redmond, Washington, described as its “modern communications and collaboration hub”. One of the major competitors of Microsoft Teams, Zoom, is probably one of several factors that led to Skype's waning influence and ultimate demise.

Microsoft did not invent Skype, but bought the platform at the peak of its powers in 2011 for about $8.5 billion. It once held a dominant share in the global messaging market, as it helped users largely sidestep potentially expensive long-distance and cellular wireless services.

Yet slowly but surely, the video-chat space became more crowded, and Apple's emerging dominance with the iPhone, coupled with FaceTime, helped to put a dent in Skype's market share. Microsoft also received criticism for advertisements on Skype, which made for a cumbersome user experience at times.

Steve Ballmer, former Microsoft chief executive, described the purchase of Skype in 2011 as a significant opportunity to expand the company's business. AFP

Skype's downfall accelerated amid the rise of the global pandemic in 2020, when Zoom, widely heralded for its simplicity and flexibility across various platforms, made it the dominant player and the envy of technology companies. As of 2024, Zoom had a market share of about 55 per cent, while Skype hovered at a little more than 1 per cent, according to Statista.

Microsoft, however, is still within striking distance of Zoom, in part because its Teams software incorporates video conferencing. According to Statista, Microsoft Teams holds a market share of 32 per cent, making it the second most used video conferencing and work collaboration app.

“The way we communicate has evolved significantly over the years. From instant messaging to video calls, technology has continuously transformed how we connect with each other,” said Jeff Taper, president of collaborative apps and platforms at Microsoft.

“Skype has been an integral part of shaping modern communications and supporting countless meaningful moments, and we are honoured to have been part of the journey. We also understand that change can be challenging and want you to know that we’re here to support you every step of the way.”

According to Microsoft, “hundreds of millions” of people currently use Teams. But the platform's rise has not been without controversy. In 2024, the company decided to unbundle Teams from its Office product after coming under antitrust scrutiny from the European Union regulators.